“Renters insurance provides a very important financial safety net when there is a disaster,” points out Jeanne M. Salvatore, senior vice president and chief communications officer for the Insurance Information Institute (I.I.I.) “And, renters insurance is relatively inexpensive—the average cost of a renter’s policy is only $187 per year, or less than four dollars per week.”

So if renters insurance is such a good idea, why do so few people have it?

“Many renters are under the misperception that their landlord’s insurance policy will reimburse them if their personal property is damaged or destroyed, but that’s just not the case,” says Salvatore.

Renters insurance provides financial protection against damage to or loss of personal possessions due to hurricanes, fire, lightning, theft, explosion and other disasters listed in the policy. There is even coverage for water damage caused by burst pipes or a neighbor who forgets to shut off the water in the tub. Coverage is available on either an actual cash value basis (depreciated value) or for its replacement cost (no deduction for depreciation).

Renters insurance also provides coverage for additional living expenses, in the event you are unable to live in your home due to a fire or other insured disaster. It also includes liability insurance if you, a family member (or even your pet) accidently injure someone and they sue you.